Health Care Spending Essay

2316 words - 10 pages

Health Care Reform Part I
Health care spending in the United States is among the highest of industrialized nations (Health Policy Education, 2011). Health care reform found its roots in the 1900s when just prior to that physicians were caring for hospitalized patients without charge. Today it is a main political issue tipping the scales toward a presidential election. Team C chose this topic because of the serious nature and as future managers, leaders in health care administration; a greater understanding is required. This team seeks to discuss three major points in regard to health care spending, such as unnecessary spending, options if health care reforms fail, and ongoing coverage ...view middle of the document...

3 Trillion
Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group.

Unnecessary health care spending
According to website (2010), “Some experts estimate that up to 30% of health care is unnecessary, emphasizing the need to streamline the health system and eliminate this needless spending” (What are the major proposals to contain cost?). Unnecessary spending or waste can be divided into three categories such as administrative, operational, and clinical Bentley, T.G., Effros, R.M., Palar, K., & Keeler, E.B., 2008). Also, according to Bentley, et al., (2008), “Administrative waste is the excess administrative overhead that stems primarily from the complexity of the United States insurance, and provider payment systems. Operational waste refers to other aspects of inefficient production processes, whereas, clinical waste is created by the production of low-value outputs” (p. 629). Causative factors in waste would include health insurance and medical uncertainties that encourage inefficient and substandard services (Bentley, et al., 2008). As stated earlier, health care spending in the United States is among the highest of industrialized nations, 16% of its Gross Domestic Product and twice that of other industrialized countries. The performance of the health care system in the United States is no better than that of other countries; one must conclude much of the spending is unnecessary. Inefficiencies remain resolute because none of the health care system’s players have strong enough incentives to increase cost-effectiveness. In addition, whether or not services are necessary, fee-for-service providers continue to be paid (Bentley, et al., 2008). Also, physician philosophy in caring for patients is as if they had a credit card when ordering treatments, surgeries, duplication of services and tests, with no regard for cost (Getzen & Moore, 2007).
In summary because of excessive administrative costs incurred by insurance companies, along with its complex provider payment systems, and inefficient and substandard services, there is waste in the health care system. According to Getzen & Moore, (2007), “Physicians are harmed by reducing unnecessary medical services, even if patients are not” (p. 206). So the United States has spiraling health care costs within a system in which physician philosophy is one of possessing a credit card with no regard to cost. Incidentally, a new term “Defensive Medicine” has evolved because of the number of malpractice suits in regard to physicians. Physicians, in an effort to protect themselves, pay high premiums for malpractice insurance, extending these costs to the consumer. It has been found that physicians order, in many cases, unnecessary tests, and treatments to avoid lawsuits (U.S. Congress, 1994).
Proposed solution for the inefficiencies of the current health care system including the complex provider payment systems...

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